16.03.202603:32:01UTC+00US 10-Year Yield Slips

The yield on the US 10-year Treasury note slipped to around 4.25% on Monday, retreating after two consecutive weeks of gains. The move came as reports that Washington will soon unveil a coalition of countries to escort commercial vessels through the Strait of Hormuz helped ease some geopolitical risk in markets. Investors are also assessing the potential for US-Iran talks as the conflict in the Middle East enters its third week.

Oil prices held steady despite US strikes over the weekend on military targets at Iran’s main oil export hub on Kharg Island, as well as US threats to hit energy infrastructure should Tehran disrupt traffic through the Strait of Hormuz. Even so, Treasury yields remain close to recent highs, with elevated energy costs stoking inflation worries and dampening expectations for Federal Reserve interest rate cuts. The Fed is widely expected to leave rates unchanged at its meeting this week, which would be Chair Jerome Powell’s penultimate policy gathering.